My Ex and I also have a fairly sizeable IRS Tax Lien. I've spoken to 2 different mortgage brokers and was told that if you can still qualify for an FHA if you are on a payment plan and can show 12 months of on-time payments. My ex has also been considering purchasing a house and he is getting consistent information.
I will admit that I have NOT tried to actually tried to apply for a mortgage because I've still been trying to get my FICOs above the magic 620 threshold. I just did manage to do that but I still have very high utilization (which will get taken care of in June when my company's stock purchase plan gives me back the 10 percent I've been kicking in for 6 months).
So while this is what I have been told (i.e. 12 months of on-time payments with the IRS), I don't have any quantifiable proof to back this up.
Good luck...
@masscredit wrote:I kind of figured liens would throw a wrench into mortgage approvals. I'm kind of surprised the person that I spoke with at the credit union didn't tell me that. I spoke with someone at my accountant's office last year about doing an OIC. He deals with tax issues and was an IRS agent for many years. He said he usually won't take on one unless he's fairly confident that it will go through. Also mentioned that they can be a lot of work. I guess the IRS wants to see tons of documents. I guess I have some thinking to do. I'd really like the big one to age off then deal with the other two. Would be nice to not have any though.
Would an an unpaid lien that has exceeded the CSED be a reason to be declined for a mortgage? It can still hurt scores while it's on the reports but the banks wouldn't have to worry about the IRS trying to seize the property. And the thing about any OIC or negotiation resetting the CSED... that's not good! There is legally no such thing as an unpaid IRS debt/lien that has exceeded the CSED ...once it expires, the IRS is by law required to cancel the debt and remove any lien ...the debt no longer exists.
I think Lemmus is an example of how things can be bad. My liens are currently listed as uncollectible so they don't bother me. I only keep enough money in my accounts to keep them open. Money for bills goes in one day and out that day or the next. I don't have a lot. A relative recently passed away so the house will be for sale. It will be cheaper for me to pay a mortgage for it than it is to pay rent. That's why I'm looking into this. Maybe I can make it happen.
Lemmus:
The Federal government agencies are notorious for not talking to each other; just because accounts have to be disclosed via the Patriot Act does not necessitate that the IRS knows about them. I won't go into your situation as I don't know it, but suffice to state my experience doesn't match yours.
TBH having worked in the government space for a Federal contractor, think virtually every cittizen who isn't directly involved would be astounded at the lack of cooperation in our government.
@masscredit wrote:I heard back from the Credit Union today. The answer was as I figured and what was said here. Actually, the words that were used were - the tax liens have to be satisfied. I asked if that meant totally paid off or in a payment plan because at that point, the liens would be withdrawn. She just said they would have to be satisfied. She was relaying info from someone in the underwritting department. I guess I have some thinking to do.
Normally I love credit unions. But not for mortgages. To say they have to be "Satisfied" means paid. CUs are pretty conservative when it comes to IRS liens. All lenders want you to be on a payment plan to prevent the lien from jumping in front of the first mortgage, but apparently your CU wants it paid entirely. That is at the extreme end of conservative.
You can get a mortgage when you are on a payment plan with the IRS. You don't even have to show 12 months of payments - usually 3 or more will do.
The IRS can be easy to work with to set up a plan. I have had personal experience in this matter too 
IME I found it easier to work with them in person at my local IRS office -rather than deal with the phone reps.
Get your plan set up. Work with them. Make your payments and then make application with a correspondent lender that has access to many different programs and originates and funds their own loans. Your situation is not unique.